Audit report reveals Sh500m lost in Kenya's SGR land compensation scheme

Taxpayers have lost over Sh500 million in questionable land compensation pay outs, The Standard can report.

An internal audit report by Kenya Railway Corporation (KRC) raised concern over irregular compensation and over-payment to beneficiaries by the National Land Commission (NLC). NLC is constitutionally mandated to acquire land for construction of the standard gauge railway.

In the report, names of beneficiaries in the KRC payment schedules differ from those in the NLC schedules, totalling Sh11 million. There is also over-payment between NLC schedule and KRC schedules of Sh9.8 million.

Some beneficiaries have been paid against one name, while others are unknown. In this regard, Kenya Railways criticised NLC over lack of valuation reports and equivalent compensations for differing sizes of acquired land, which could have resulted in double payments.

The report highlights huge disparities between valuations of two sisal plantations which had a variance of Sh337 million.

poorly kept

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"DWA sisal plantation at Kibwezi, which was fairly well kept was compensated an average of Sh1.5 million per hectare, while Voi plantation Ltd whose plantation was poorly kept was compensated Sh24 million per hectare," the audit report.

It indicates that DWA sisal plantation was awarded Sh50 million for 32.69 hectares while Voi Plantation received Sh360 million for 14.96 hectares.

There are other over valued compensation and unexplained duplication of over-payments totalling Sh19 million. The irregularities are mainly in Eastern and Coast regions, where the compensation process is complete. For instance disbursement of land to the wrong people totalled Sh3.6 million.

Again in Voi, those with undeveloped property of different sizes were all paid Sh1.29 million. The audit also highlighted uneven compensation of public utilities land to illegal beneficiaries at Mtito Andei where Sh43 million may have been paid to undeserving persons.

"The public utilities land which was set aside by the Makueni County government for stadium, primary school, slaughter house and cemetery were allocated to people irregularly and subsequent compensation was paid to them instead of the county government and may have been compiled by the MCA," states the audit.

"We recommend justification to be availed on how the compensation were arrived at and subsequent recovers to be done, in the case of over-compensation."

KRC noted inconsistencies in the NLC master list. For example the irregular compensation at Manyani, Mbololo and in evenness between physical land size and their corresponding recorded measurements- Kathekani.

When contacted KRC Managing Director Atanas Maina said the audit was jointly carried out with NLC and they expected the commission to shed light on some of the concerns highlighted. "It is not the final draft. It is a document we shared with NLC to get answers to the queries raised," said Mr Maina.

Senate Lands Committee Chairman Lenny Kivuti told The Standard that NLC was expected to table a report before the committee by today.

"The matter was raised on the floor and NLC has promised to table a report this Tuesday. Once it is laid, we will issue a statement on the same. Kenyans will get to know about the payment schedules," he said.

NLC Chairman Muhammad Swazuri was not immediately available for comment. 

Transport Cabinet Secretary James Macharia said: "The cost, the demand for compensation in what we call kilometre zero to eight is about Sh8 billion. Almost the same as what was being asked from kilometre eight to kilometre 472 so obviously there's a problem there."

Speakers Ekwee Ethuro (Senate) and Justin Muturi (National Assembly) have directed the relevant committees to deal with the issue.